Ten years after volcanic ash forced an abandonment of the island’s capital, the Bank of Montserrat is opening a new headquarters. Hugh O’Shaughnessy reports.

The manager’s office in the Bank of Montserrat has been snug rather than smart for the past few years. When The Banker visited Anton Doldron in October in what looked like a small bedroom on the upper floor of a erstwhile private house at Hilltop, in the north of the island, he was looking forward to moving out of his temporary accommodation. The bank had been occupying it since ash and rocks from the Soufriere volcano in 1995 started to rain down on (and later buried) the original headquarters sited in the centre of Plymouth, the island’s former capital, now abandoned.

The bank’s new green-roofed building down the road at Brades was nearly ready for occupation and Mr Doldron and his operations manager Clifford Lyght were thinking about the move and imagining the luxury of offering clients the services of an ATM, only the second on the 40 square mile island. “It will back up our new loan campaign with reduced interest rates and the introduction of credit card operations we are introducing,” says Mr Doldron, a Trinidadian.

The tiny Bank of Montserrat, founded in 1988, has survived the cull of the vast majority of the hundreds of brass-plate banks that were doing questionable deals of the sort long registered in the offshore Caribbean banking industry. They were put out of business by government decree.

A senior financial expert in what is of one of the UK’s few remaining colonies remarked: “A nail was put in their coffin and a stake driven through their heart.”

Picking up the pieces

Today the Bank of Montserrat has weathered a spectacular natural disaster. After evacuations and departures, the colony’s population is down to some 5000 – though there are plans to tempt some 2000 Montserratians back home from the UK and the neighbouring West Indian islands.

The younger islanders are so far showing little enthusiasm to return from London and other UK cities or from North America so effort is being concentrated on getting the older ones to return and bring back with them whatever expertise they have acquired abroad. That way, it is thought, the economy could best be boosted. With a 4.5% growth in the economy the bank is congratulating itself on an 8% rise in income in 2004 to EC$10.5m ($3.95m).

The island’s economy is being sustained by UK assistance. Using deposits of financial aid that the colony’s government has been receiving from the UK, the bank with its 20 staff today makes the bulk of its profits from investments that have grown by some 40% to total EC$104.5m. The return on assets in 2004 was 1.54%, slightly down from the previous year.

The volcanic disaster had come hard on the heels of a man-made reverse when imprudent lending by the Bank of Montserrat, notably in real estate, ended in a EC$14.7m bailout by the Caribbean Assets and Liabilities Management Services (CALMS), a subsidiary of the Eastern Caribbean Central Bank (ECCB), which it is progressively paying off.

According to the ECCB: “In June 1993, under the Special Emergency Powers, the ECCB came to the assistance of the Bank of Montserrat, which ran into difficulties. Certain non-performing loans and advances were bought by the CALMS. The purchase was effected by the issue (by the CALMS) of a 20-year interest bearing promissory note.”

“We expect that the balance will be repaid before its maturity date of 2013,” says Frank Edwards, Bank of Montserrat chairman.

At least the bank got out of Plymouth in better shape than Barclays, which abandoned EC$1m in notes in its vaults as the ash covered the premises. It later found that highly placed and well informed robbers in the deserted town later broke in with steel-cutting equipment, stole them and put them into circulation throughout the region. Barclays no longer does business there.

Mr Edwards declares his intention to continue pushing the Bank of Montserrat into better times. In the end, its volcano may turn out to have been a blessing in disguise for this tiny community. The island’s tourist board, which financed an appearance at the World Travel Market in London in November, seeks to put it on the map as one of the biggest natural attractions in the western hemisphere.

The British-funded Montserrat Volcano Observatory is installing a safely sited visitors’ centre with sophisticated exhibits in sight of the volcanic action which should be a big draw. That could make this island attractive for eco-tourists and swell the little bank’s operating surplus.


All fields are mandatory

The Banker is a service from the Financial Times. The Financial Times Ltd takes your privacy seriously.

Choose how you want us to contact you.

Invites and Offers from The Banker

Receive exclusive personalised event invitations, carefully curated offers and promotions from The Banker

For more information about how we use your data, please refer to our privacy and cookie policies.

Terms and conditions

Request a demonstration to The Banker Database

Join our community

The Banker on Twitter